The bottom line is that Forex is a very powerful tool. With leverage as high as 200:1, taking a cash position in the market can yield both huge rewards and of course catastrophic losses. For this reason the only wise decision is to trade a demo account - an account with fake money. This means that you can gain some experience with Forex and test market theories before you commit real cash to a position. Consider it a training ground.
Now most every market expert will agree that a demo account is essential for those starting out in the Forex for the first time. While this is true there are some real dangers that can be deadly to your trading career.
False Security
Demo accounts can be a bit too cushioning from the hard and fast realities of real time trading. This is because there is no emotion involved.
As you may or may not know, the level of emotions during your first live trade - or your hundredth for that matter - are astounding. You will swing through fear to greed, pleasure, to pure terror - all within mere moments of each other. Very few other careers can have this kind of impact on your psyche like trading can. All of this to say that you will never know the emotional upheaval that you will experience until you go live. And then you will have to contend with those fears; you will have to learn to make objective decisions during an avalanche of emotions.
Timing Is Everything
Second is the fact that demo accounts do not provide feeds with the same response time as live accounts. Providing that level of service is a premium that is only reserved for those who have paid the brokerage fees and have their cash on the line. Plus the demo trading platform is where most brokerage services beta test their updates. This means that the system can be glitchy or non-operable depending on how much experimentation is going on.
Wisdom would dictate that you practice trading the Forex on the same platform you intend to use when going live. Believe me when you are making that first live move, there will be confusion over issues you thought you understood, and fear will be adding to that confusion.
Finally, even the best trading system can be ruined by your emotions, which is why you use a Forex demo account - However you may want to consider using a trading robot who not only knows profitable trade signals, but also trades 24/7 without any emotion. Find out more - and enter to win a 1 on 1 free consultation with a millionaire trader... Click Here > http://ForexTradingRobot.info
Reuters - Stocks fell on Monday as a bankruptcy filing by U.S. investment bank Lehman Brothers Holdings Inc and cascading fears about the stability of other major financial institutions spooked global markets.
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